Daily market review

United States

Stocks were mixed in flat reaction to Federal Reserve minutes that offered no surprises but did confirm that tapering talk was underway. The Dow rose 0.3 percent while the NASDAQ was fractionally higher.

The minutes of the June 15-16 FOMC meeting showed policy makers remained cautious about the economic outlook and willing to remain patient about making any changes to interest rate policy or their asset buying program.

Yet there were observations that the recovery may bring about rate hikes and reductions in asset purchases sooner than previously thought – especially for the latter. Inflation expectations were said to be well anchored and "broadly consistent" with the Fed's longer-run inflation goal.

A JP Morgan upgrade gave engine-equipment maker Generac a lift, up 0.8 percent, while trading platform MarketAxess fell 4.6 percent on a fall in trading volume.

These price data reflect observations at 4:00 PM US ET: Dated Brent spot crude oil fell $1.30 to US$73.23 while spot gold rose US$6.43 to US$1,803.51. The US dollar firmed vs. most major currencies. The US Treasury 30-year bond yield fell 5 basis points to 1.94 percent and the 10-year note yield fell 4 basis points to 1.32 percent.


After sharp losses on Tuesday, European shares rallied on Wednesday supported by declining bond yields and led by Germany's DAX which rose 1.2 percent and the FTSE which gained 0.7 percent. Caution ahead of the FOMC minutes (released after European markets closed) limited the day's activity.

Weaker-than-expected economic news is supporting central bank hopes that inflation pressures will not accelerate. Germany's 10-year Bund yield fell 3 basis points to minus 0.30 percent while the UK Gilt 10-year yield also fell 3 basis points to 0.60 percent.

In company news, Royal Dutch Shell fell 0.9 percent as favorable buyback and dividend news was offset by a decline in oil prices; software giant SAP got a 4.2 percent lift on an upgrade by Bank of America.

Industrial production in Germany undershot the market consensus again in May, down a second successive 0.3 percent and down four of the last five months. Likewise weak were retail sales in Italy, up only 0.2 percent on the month in May following a 0.1 percent dip in April.

Asia Pacific

Asian stocks were mixed Wednesday in choppy trade ahead of the FOMC minutes and following Tuesday's defensive session in the US. Japan's Nikkei lost 1.0 percent with Singapore's Straits Times was down 1.5 percent.

Amid rising Covid cases and extended restrictions in Korea, the KOSPI fell 0.6 percent. Samsung Electronics and chipmaker SK Hynix both fell, down 0.5 and 1.2 percent, respectively.

But some indexes did gain led by Australia's All Ordinaries which rose 0.9 percent to reverse Tuesday's 0.8 percent dip that followed the Reserve Bank of Australia's tapering move. China's Shanghai was another gainer, up 0.7 percent, as was India's Sensex which gained 0.4 percent.

Looking ahead*

There are no major indicators scheduled for Thursday release in Asia. In Europe, Swiss unemployment, German merchandise trade, and ECB minutes will be released. In US, reports include jobless claims and consumer credit.

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